Cabinet approves Y423 bil new stimulus for ailing economy
Baku, October 27 (AZERTAC). Japan`s cabinet approved a 423 billion yen economic stimulus package on Friday, moving to fend off recession as the recovery in the world`s third biggest economy falters.
The emergency spending package, which is double the size originally expected, is also meant to help make up for lost momentum from reconstruction in the region devastated by the March 2011 earthquake and tsunami.
But officials said the boost to the economy would be modest, in the range of 0.1% of gross domestic product.
The new stimulus will be paid for from government reserves. Prime Minister Yoshihiko Noda`s leeway to boost spending is limited by a legislative standoff preventing issuance of deficit-covering bonds as the country faces a “fiscal cliff” of some 38.3 trillion yen.
Noda has ordered the government to draft further measures to boost growth by next month, and the legislature is due to convene an extraordinary session on Monday.
Chief Cabinet Secretary Osamu Fujimura said Noda told the cabinet the package was meant to speed up Japan`s revitalization and help end a long and debilitating spell of deflation.
Friday`s decision coincided with news of a 0.1% fall in the consumer price index in September, adding to pressure on the central bank to ease policies to help fight deflation, or falling prices, which can hinder economic growth.
National policy minister Seiji Maehara has been among the most vocal officials pushing the Bank of Japan to do more to boost growth, sitting on central bank board meetings to emphasize the government`s desire for more action.
Japan`s economy has remained in the doldrums for over 20 years and a hoped-for export-led recovery has been stymied by the European crisis and slowing growth in China and elsewhere.
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